If you serve as an estate executor, you will carry out the last will and testament written by the decedent. However, wills come in various types and perform different functions. One uncommon kind of will is the pour-over will.
This is an estate document that works in tandem with a trust, filling an estate planning gap that some people create without knowing it.
Completing the funding of a trust
According to CNBC, a 2022 survey found that 67% of Americans have no estate plan. 40% of respondents said they just have not gotten around to making one. However, life distractions can also prevent people with estate plans from updating them when needed.
Failing to change a trust is a prime example. Some trust grantors do not add new assets or property to the trust when they are alive. If not otherwise accounted for, leftover assets will end up in the estate. Fortunately, a pour-over will catches unaddressed assets and pours them into the trust after the death of the testator.
Steps needed to transfer assets
A testator must create a trust first and then sign a pour-over will. The document designates the trust as the beneficiary of the assets. Once in the trust, the assets are subject to the rules of the trust and the management of the trustee.
Probate still plays a role
Keep in mind that pour-over wills do not completely bypass probate. An executor still oversees the transfer of the assets to the trust. In the process, executors may have to deal with events such as will contests and creditor claims which could slow down or halt the transfer of leftover assets.
In spite of possible probate delays, a pour-over will establishes the wishes of the testator, possibly making the difference in speeding probate to its conclusion.